If you never have an auto or homeowner’s claim, you’re a lucky person. If you aren’t that lucky and have a claim, it’s likely to be stressful and might even be hard to think straight.
In this newsletter I share some thoughts on claims so you’ll be better prepared if you have one. Keep in mind that actual insurance coverage is always determined by the policy contract…this newsletter is for educational purposes only.
I think about the claims process as three steps: stabilize, decide and proceed.
- If possible, move your vehicle to a safe location
- Call police
- Get information from the other driver (take photo of license and insurance card)
- Don’t discuss the incident with the other driver. Don’t admit fault or disclose your policy limits.
- Take photos of the scene, damage and other vehicle license plates
- Later, get a copy of your police report
- If the damage is above your deductible, or if there are other parties involved, you should file a claim with your carrier
- If you’re not sure you should file a claim, call me
- If filing a claim, call the insurance carrier
- Secure a rental car if desired
- Find and engage a body shop (carrier will recommend some they stand behind, or you can choose one recommended by your dealer)
- The body shop will bill your carrier
- Mitigate damage (e.g. call fire department, turn off water, arrange temporary repairs, stop things from getting worse)
- Determine extent of damage…get a professional repair estimate
- If the damage is below the deductible or it’s not covered, don’t file a claim. In general, sudden/accidental damage is covered but wear/tear is not.
- If you’re not sure if you should file a claim, call me. What is covered can be tricky, like a sudden leak from an old roof where interior water damage is covered but the old roof itself is not.
- If filing a claim, call your insurance carrier
- Make alternative living arrangements if necessary
- Find and engage a contractor for repairs
- Your carrier claims adjuster will coordinate payment
Your insurance carrier is equipped to walk you through the claims process step by step.
Don’t Join This Club
If you have a large, legitimate claim, insurance carriers try to be helpful, pay the claim and move on…that’s their business. But if you file multiple claims, or frivolous claims, even if they are not paid, the carrier could asterisk you as a problem client and either cancel or non-renew your insurance.
Here are some ways to get that problem client asterisk nobody wants:
- Multiple or frivolous claims
- Live in a high risk wildfire zone
- Consistently pay premiums late
- Fail to take risk management steps required by your carrier
- Be rude or threatening to your carrier or agent employees
Now carriers can’t cancel your insurance for just anything. In California there’s a one year temporary reprieve from cancellation due to fire zone. Also in California carriers aren’t supposed to use credit rating for underwriting. And in any state it’s hard to be cancelled just for being rude. But you can get the asterisk for any of the things on the above list. Then later, when you make a payment one day past the grace period, they can and will cancel you for non-payment and will not reinstate you like they might a typical client.
All the carriers I choose to represent have good to excellent reputations for resolving claims. But disputes occasionally occur. The reality is in a claims dispute you have limited leverage because carriers aren’t sad to see disputing claimants leave. And captive agents have limited leverage to help because they take orders from the carrier. But an independent agent like myself has leverage to help you as claims advocate because carriers want me to continue supporting their products over their competition.
Now you might think if you’re non-renewed, you’ll just go with a different carrier. Not so simple. Insurance companies share information. And insurance applications include a question that reads “has your insurance ever been cancelled or non-renewed?” If that question is answered yes alarms go off and you will be paying higher rates, sometimes much higher. If that question is answered no when the real answer is yes that would be considered a “material misrepresentation” and future claims may be denied.
So remember that insurance is about sweating the big stuff. Insurance carriers pay big claims every day. But it doesn’t pay to push the envelope with questionable little claims then get into a fight with your insurance carrier. If you feel you’re not being treated fairly on a legitimate claim, call me and we’ll work together to get you what you deserve.